Dreyfus

Propriété industrielle & économie numérique

Intellectual property in the digital age

Product placement is defined as all forms of commercial, audiovisual communication that include a product, a service or brand, or make reference to it by inserting it into a program, in exchange for payment or other benefit in kind (1). This communication method is termed hybrid whenever it integrates a brand into a non-commercial context in order to influence the spectator. The greater the program’s popularity, the greater the brand exposure, and sales of branded products will increase correspondingly.

Nevertheless, as regards product placement, there is a significant gap between France and the United States. In France, product placement does not account for more than 5% of total film budgets, against 30% in the United States. As an example, the Apple brand alone financed 16% of the total budget of the film “Mission Impossible: Phantom Protocol” in 2011, representing an investment of $23.5 million.

The success of product placement in the US is essentially due to the absence of regulations or legislative structures in this domain.

In France, product placement has been prohibited for a long time (2). The French Higher Audiovisual Council (CSA) allowed a certain tolerance for the cinema without specific guidelines. Then a 2007 European directive (3) reaffirmed the principle of the prohibition of product placement across all audiovisual media, but left to the discretion of Member States, however, the possibility of allowing it within a given framework. France transposed the directive in 2009 (4) and granted the CSA the authority to determine the conditions under which audiovisual communication programs can feature product placement (5). The CSA defined the conditions as follows:

Product placement is only authorized in films, audiovisual fictions and music videos unless the production is for children. It is banned in all other programs.

The spectator must be informed of the existence of product placement notably by the use of a pictogram appearing as follows on the screen.

As well as being lucrative and providing an increasing number of product sales, product placement in films also has an impact on the brand’s reputation itself. Placement can be extremely beneficial in cases where the trademark holder is responsible for the placement, but equally it can harm the brand’s reputation where this is not the case. It may be that the holder is not satisfied by a placement, either because it hadn’t been requested or his opinion had not been sought, or because the placement did not respect the terms of the contract. In certain cases, unsolicited placements can devalue the brand or product. In this type of case, lawsuits could be filed for abusive, unauthorized use of a trademark or for tarnishing the image or reputation of the brand.

Product placements must therefore be chosen with care. Need advice? Dreyfus, specialists in trademark protection, are here to assist you.

(1) Article 1(m) in directive 2007/65/CE.(2) 1989 Directive n°89/552/CEE and 1992 transposition law prohibiting product placement with the exception of cinematographic productions.(3) Directive 2007/65/CE of the European Parliament and the Council of December 11 2007 modifying Council directive 89/552/CEE.(4) Law n° 2009-258 of March 5 2009.(5) Deliberation n° 2010-4 of February 16 2010 concerning product placement in television programs, published in the Official Journal on March 5 2010, modified by deliberation on July 24 2012, published in the Official Journal on August 7 2012.